Low cost business setup in Dubai: [Updated for 2020]

Low cost is certainly not the first thing that springs to mind when you think of Dubai. The emirate’s sprawling metropolis, imposing skyline and luxury landscape send the opposite message.

However, Dubai is not all about bright lights and big business. There are plenty of startups, freelancers and micro-businesses here too. Dubai’s welcoming business environment, superb trading location, low tax rate and encouraging bureaucracy is open to all – both large and small.

The cost of business setup in Dubai does not have to be prohibitive. If you’re looking to start a business with limited capital, this is the place to do it. There are countless opportunities here, in fields as diverse as hospitality, travel, technology, and trading.

With the right guidance from a company formation expert, it’s perfectly possible to start a business in Dubai with little or no money. Here’s how.

Low-cost business setup in Dubai

If you’re looking for the most cost-efficient way to register a company in Dubai, look no further than the emirate’s free zones.

Free zones truly are the home of low-cost business setup. Not only do they offer affordable license packages, inclusive of visa costs, but many also provide facilities and premises for ad-hoc use.

One of the largest outlays when running a business is office space. When you set up in a free zone, you do not have to worry about this expense. Many offer the use of co-working facilities as part of the package price, along with meeting and conference rooms and reception services if required.

Should you need a larger space, such as a showroom or warehouse, there is an additional cost. But many free zones do provide units at rates much lower than in the mainland.

The advantages to free zone setup don’t end there. Along with Dubai’s 0% tax rate on both corporate and personal income, free zone businesses benefit from 100% customs tax exemption, zero currency restrictions and the ability to repatriate all capital and profits.

What is the cheapest free zone in Dubai?

It is difficult to pick out the cheapest free zone in Dubai.

The most cost-effective free zone license package will depend on numerous factors such as the nature of your business, the number of visas you require and whether or not you need the use of premises.

There are plenty of low-cost free zone license packages available across Dubai. You can choose from any of the following free zones:

Dubai Technology Entrepreneur Centre (DTEC)

Dubai 1 Central

Dubai Airport Free Zone (DAFZA)

Dubai Healthcare City

Dubai International Financial Centre (DIFC)

Dubai Internet City

Dubai Knowledge Park

Dubai Media City

Dubai Multi Commodities Centre (DMCC)

Dubai Silicon Oasis

Dubai South

Jebel Ali Free Zone Authority (JAFZA)

If you are really on a mission to keep costs down, you may even like to look at free zones outside of Dubai, in emirates such as Ras Al Khaimah, Sharjah and Fujairah. Many offer competitive license packages and overheads are sometimes lower than in Dubai.

How to start a business in Dubai

The cost of business setup in Dubai is largely dependent on the type of company you wish to set up. If you need a large workforce or the use of a warehouse or factory then your outlay will be significantly more than if you’re setting up alone.

That’s why the first decision to make before starting out in Dubai is to outline your chosen business activities.

Your activity or activities must be chosen from a pre-determined list. It’s important that you list every activity that applies to your business when making your application as failure to do so can lead to fines or even license revocation.

There are over 2,000 to choose from so no matter your industry or the type of business you undertake, you are sure to find an activity that fits the bill.

The next step of the low-cost business setup process is to choose your company name.

This process takes on more importance here in Dubai than elsewhere. That’s because as well as the need for a name that’s catchy and captures the essence of your business, you’ll also need to stick to the UAE’s clearly defined naming conventions.

In short, UAE company names must not contain any blasphemous or offensive language, any references to well-known institutions or any abbreviations of your name – though your full name is acceptable.

Your name should also have a legal entity attached to it such as FZE or LLC. It must also relate to your business activity, not resemble the name of any other company, and be available to register.

Next, you can apply for your trade license. If you’re setting up in the mainland, the license will be issued by Dubai Department of Economic Development (DED). If you’ve chosen a free zonesetup, your license will be issued by the chosen free zone.

In both cases, you are usually required to submit several documents along with your application form, including:

A copy of your passport – and that of any other shareholders

Your business plan

A copy of your signature

A No Objection Certificate from your current employer (if applicable)

You will also need to apply for a visa so you can work in the UAE. This process involves four stages including a medical fitness test and biometric capturing. In all, it usually takes less than a week.

As the holder of a Dubai trade license, you can also sponsor others such as children, a spouse or domestic staff for their visas too, providing you meet the eligibility criteria.

Whatever your chosen business, one of the most cost-efficient ways to register a company in Dubai is to work with a company formation expert. We can manage the entire process for you, aligning your needs and your budget to a suitable license package.

Starting your low-cost Dubai business

By following the steps above, it is possible to obtain your trade license and establish a low-cost business in Dubai.

However, it is always advisable to undertake the steps with the assistance of a registered company formations agent to eliminate any potential hassles that might arise.

With more than 15 years of experience in company incorporation, Worldwide Formations can help you get your business up and running within a week or two. We’ll manage your license and visa application and correspond with all relevant authorities for you. All you need to do is wait for the green light to start trading.